TMI Blog2012 (10) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ind by the A.O. while examining the expenditure under brand promotion and brand building. The expenditure incurred by the assessee is not creating any enduring benefit of an asset but is rather helping the assessee in augmenting its sales and resultantly its profit. Even if it is presumed that the building of brand image of “Nirvana” is giving advantage of enduring benefit to the assessee, still it would be on revenue account as there is no creation of a tangible or intangible asset of enduring nature to the assessee. Thus from the facts of the case it can be concluded that these expenses incurred by the assessee has not resulted in any kind of addition or augmentation of any profit making asset. Thus the view taken by the A.O. is prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irvana which is nothing but capital expenditure for creating an intangible asset. In response, the assessee submitted that looking to the details and nature of expenses, which has been incorporated in page 2 and 3 of the impugned order, goes to show that these expenditures are purely revenue in nature. Further it was submitted that out of expenditure of Rs..2,94,52,315/-, a sum of Rs..98,17,438/- has already been reduced in the computation of income by the assessee and balance amount of Rs..1,96,34,877/- has been treated as deferred revenue expenditure, which has been written off partly in the A.Y. 2007-08 and partly in the A.Y. 2008-09. Thus the assessee company has claimed the entire amount as revenue expenditure and has written off in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in a stereotyped manner. In this context, it is seen that the Assessing Officer merely called for details of the various expenses and no query was raised to whether the expenditure is capital or revenue in nature. 8. As admitted by the assessee, the expenses have been incurred by the assessee for brand building for its product Nirvana as distinct from the other products dealt with by the assessee. Such expenditure is incurred with a view to derive enduring benefit as evident from the fact that the assessee has itself estimated a long life of the product by amortization of the expenditure on the matching concept . That the expenses were incurred in the course of business and is related to carrying on and conduct of the business as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the Ld. CIT cannot invoke reversionary jurisdiction u/s. 263 to cancel the assessment order on the same issue and to take a different view. In support of this contention, reliance was placed on the following decisions:- (i) Manish Kumar v. C.I.T. [2012] 134 ITD 27 (Indore). (ii) Maithan International v. ACIT [2012] 134 ITD 393 (Kolkata). (iii) Roshan Lal Vegetable Products (P.) Ltd. v. ITO [2012] 18 taxmann.com 295 (Amritsar Trib.) 6. On the other hand, the learned Sr. DR submitted that the A.O. has not carried out any enquiry on the other expenses which is borne out from the fact that the same has not been mentioned in the assessment order. Further, he submitted that even if it is a debatable issue, section 263 can be invoke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenditure under brand promotion and brand building. For invoking the jurisdiction u/s.263, it is essential that Commissioner has to be satisfied with a twin conditions, namely, (i) the order of the A.O. sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the Revenue. If any one of them is absent, the jurisdiction u/s.263 fails. It is also a settled principle of law that if the A.O. after examining the entire details and after applying the correct provisions of law adopt one of the course permissible in law even if it has resulted in loss of revenue or there are two possible views, the A.O. has taken one view, it cannot be treated that the order passed by him is erroneous or prejudicial to the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee s trading operations or enabling the management and conduct of the assessee s business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The test of endu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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